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The NASD said on Wednesday it had imposed a fine of $350,000 against investment management firm Sanford Bernstein in New York and fined Charles Hintz, one of the firm's research analysts, $200,000 for violations of the NASD's research analyst conflict of interest rules.
The NASD -- formerly known as the National Association of Securities Dealers -- found that Sanford Bernstein, a subsidiary of Alliance Capital Management, had favourable ratings on Morgan Stanley and Lehman Brothers securities that remained in effect while its research analyst, Hintz, was selling his own shares in the two companies. This was a violation of NASD rules prohibiting trading contrary to an analyst's recommendation.
Hintz also engaged in transactions in six securities held in a discretionary personal account that were contrary to his then-current recommendations.
Neither Sanford Bernstein nor Hintz admitted or denied the charges, but they consented to the entry of NASD's findings.
The fines are the largest NASD has imposed to date for violations of its new research analyst conflict of interest rules, which came into effect in July 2002.
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